Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) financing activities for the year was:
A)($22)
B)$3
C)$4
D)($15)

Question

Buckley Corporation's most recent comparative balance sheet appears below:  The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) financing activities for the year was:
A)($22) 
B)$3 
C)$4 
D)($15)

Quizplus · Accepted Answer

To find the net cash provided by financing activities for the year, we need to look at the changes in the long-term liabilities and stockholders' equity sections of the comparative balance sheet. We can see that the long-term debt increased from $100 to $110, which means that there was a net increase in long-term debt of $10. There was no change in the common stock or retained earnings accounts, so the total increase in stockholders' equity was just the $10,000 increase in the contributed capital account.

Therefore, the total net increase in liabilities and stockholders' equity was $10 + $10,000 = $10,010. Since the company paid a dividend of $22 during the year, the net cash provided by financing activities was a decrease of $10,010 - $22 = $9,988. This is a decrease, because the company received a net increase in funds from financing activities.

So, the correct answer is D) ($15).

Buckley Corporation's Most Recent Comparative Balance Sheet Appears Below